32 F.4th 824
9th Cir.2022Background
- PLS launched a nationwide "listing network" for pocket listings that allowed sellers to control listing disclosure and attracted rapid agent membership growth.
- NAR-affiliated MLSs (including CRMLS, Bright MLS, MRED) viewed pocket-listing networks as a competitive threat and coordinated to respond.
- NAR adopted the Clear Cooperation Policy: within one business day of public marketing, a listing must be submitted to the MLS; noncompliance exposed agents to fines or loss of MLS access.
- PLS alleges the Policy coerced seller agents (its suppliers) to list on MLSs, removed listings from PLS, reduced PLS membership and foreclosed competition, injuring PLS and harming the listing-services market.
- PLS sued under Section 1 of the Sherman Act and California’s Cartwright Act; the district court dismissed for failure to plead antitrust injury and insufficient conspiracy allegations as to MRED.
- The Ninth Circuit reversed, holding PLS adequately pleaded a Sherman Act violation (group boycott) and antitrust injury, and adequately alleged Bright’s and MRED’s concerted action; remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PLS must allege harm to "ultimate consumers" (home buyers/sellers) to show antitrust injury | PLS: antitrust injury can be alleged by showing harm to buyer groups that consume the listing service (agents); competitors who are consumers of the defendant’s product can plead injury | Defendants: plaintiff must allege direct harm to ultimate consumers (home buyers/sellers) | Court: PLS need not allege injury to ultimate consumers; harm to agents (consumers of listing services) can satisfy antitrust-injury requirement |
| Whether the Clear Cooperation Policy states a Sherman Act violation as a group boycott and whether per se or rule-of-reason applies | PLS: Policy is a classic group boycott that coerced suppliers, foreclosed competition, and may be a per se unreasonable restraint | Defendants: Policy does not cut off access; agents remain free to choose platforms; Policy is procompetitive (reduces search costs) | Court: PLS plausibly pleaded a group boycott; coercion exists even if access is not completely cut off; PLS adequately pleaded a per se boycott claim (leave to district court to decide analytic framework later) |
| Whether Amex (two-sided platform market-definition rule) applies at pleading stage and whether PLS satisfied it | PLS: Amex doesn't bar pleading-stage claims or applies only to simultaneous-transaction platforms; in any event, PLS alleges harms on both sides (buyers’ and sellers’ agents) and strong indirect network effects | Defendants: Amex requires market-definition including both sides and PLS failed to plead harm to participants on both sides (home buyers/sellers) | Court: Amex can apply at pleading stage in some indirect-evidence claims, but PLS’s allegations satisfy Amex’s requirements (alleged harms to agents on both sides and market-wide effects) |
| Whether PLS adequately alleged Bright and MRED joined the conspiracy | PLS: alleges meetings, white paper, coordinated advocacy, and executives’ statements showing a common scheme to adopt and enforce the Policy | Bright/MRED: argue absence of concerted action or that adoption was independent | Court: Allegations (meetings, white paper, coordinated advocacy, timing) plausibly show conscious commitment to a common scheme; PLS adequately pleaded concerted action by Bright and MRED |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading standard: factual allegations must plausibly show liability)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (antitrust complaints must plead enough facts to make conspiracy plausible)
- Ohio v. American Express Co., 138 S. Ct. 2274 (2018) (two-sided platform analysis; market-definition must sometimes include both sides)
- Glen Holly Entertainment, Inc. v. Tektronix, Inc., 352 F.3d 367 (9th Cir. 2003) (a business that consumes a product as an input can be an antitrust "consumer")
- Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477 (1977) (antitrust standing requires "antitrust injury")
- Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104 (1986) (predatory pricing harms both competitors and competition)
- Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284 (1985) (group boycott/per se analysis is fact-dependent)
- Nat’l Soc’y of Prof. Eng’rs v. United States, 435 U.S. 679 (1978) (procompetitive justifications cannot justify restraints that foreclose competition)
- Am. Needle, Inc. v. Nat’l Football League, 560 U.S. 183 (2010) (concerted action requirement under Section 1)
- Pool Water Prods. v. Olin Corp., 258 F.3d 1024 (9th Cir. 2001) (reiterating that non-predatory price competition is not antitrust injury)